Irish Examiner View: World rich enough to avert chaos

There is something strangely reassuring about the fact that this bank holiday weekend that gardaí used pandemic powers only seven times.
Irish Examiner View: World rich enough to avert chaos

There is something strangely reassuring about the fact that this bank holiday weekend that gardaí used pandemic powers only seven times.

Those seven arrests were necessary when people repeatedly ignored directions limiting travel or exercise. Another 144 arrests were made to enforce restrictions but they were made under older legislation.

It is always difficult to be enthusiastic about conceding power to the state, even at a moment like this, but these figures show the kind of restraint more than proportionate to our lockdown situation.

Charges that this had become a police state have been exposed, again, as opportunist exaggerations.

How cheering it might be if we could as easily shrug off International Monetary Fund predictions that our economy will be among the worst hit in Europe as exaggeration. The IMF, in its World Economic Outlook, yesterday warned we face the worst global slump since the depression of the 1930s. If that prediction was not disheartening enough, the IMF forecast this economy will be among those hit hardest in Europe.

The New York agency warned that Irish unemployment rates will outstrip those in other eurozone states. Recent CSO figures show due to the pandemic there are over 500,000 people on either the live register or claiming payment.

The IMF view is not by any means exceptionally pessimistic. The UK’s Office for Budget Responsibility yesterday predicted a 35% fall in the UK’s GDP for the second quarter. It suggested unemployment will rise by more than 2 million to 10% in the same period, but then declines more slowly than GDP recovers.

French predictions are as grim. The statistical institute, INSEE, has estimated that economic activity will fall by 35%. Not to be outdone, naturally, America’s Federal Reserve Bank of St Louis, in a “rough initial estimate” said US real GDP might fall by up to 50% during the period of full economic lockdown. The IMF predicts that America’s GDP will contract by 5.9% this year but recover slightly to 4.7% in 2021.

Even if there are almost as many sets of dismal figures as there are assured experts none of these are for the faint-hearted, especially those whose memories of the last financial implosion remain all too real. They represent huge challenge on myriad levels and though forecasters bookend the collapse at a date not too far over the horizon huge disruption may be, for a time at least, the new norm.

Yet, against these dire predictions a few simple facts intervene: the world is as never before awash with money. It was never easier or cheaper to borrow money.

Most governments can, if they really wish to and are not hidebound to ideas of balanced budgets, crippling austerity for citizens but multi-billion rescue packages for too-big-to-fail institutions, make society-saving interventions. There has been a lot of talk about how the pandemic will change they way we live.

The economy and its hierarchy of obligations will be the first and most important arena for this overdue realignment. Beating this pandemic is ultimately an exercise in solidarity. Solidarity on economic survival will be in time as important as almost any other response. Yes, it must be different this time.

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